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Abstract:
Russia curbed its natural gas supply to Europe in 2021 and 2022, creating a grave energy crisis. This Article empirically estimates the crisis response of natural gas consumers in Germany—for decades, the largest export market for Russian gas. Using a multiple regression model, we estimate the response of small consumers, industry and power stations separately, controlling for the nonlinear temperature-heating relationship, seasonality and trends. We find significant and substantial gas savings for all consumer groups, but with differences in timing and size. For instance, industry started reducing consumption as early as September 2021, while small consumers saved substantially only since March 2022. Across all sectors, gas consumption during the second half of 2022 was 23% below the temperature-adjusted baseline. We discuss the drivers behind these savings and draw conclusions on their role in coping with the crisis.
